ENGLISH ABSTRACT. We had guessed in the early Summer that only Giorgio Napolitano, the Italian Republic President, that we have (even unconfessable) REASONS to call King George 1st, might bring Italian sovereign debt out of failure – where populisms were going. Now, it might be happening. Last train for Yuma.

With interest rates on its sovereign debt surging well above seven per cent, there is a rising risk that Italy may soon lose market access. Given that it is too-big-to-fail but also too-big-to-save, this could lead to a forced restructuring of its public debt of €1,900bn.

That would partially address its “stock” problem of large and unsustainable debt but it would not resolve its “flow” problem, a large current account deficit, lack of external competitiveness and a worsening plunge in gross domestic product and economic activity.

Abandoned Homes by Serrator

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